12 Small-Cap Stocks With Insider Buying
In this article, we discuss 12 small-cap stocks with insider buying. If you want to see more stocks in this selection, check out 5 Small-Cap Stocks With Insider Buying.
Insider buying refers to a company's officers, directors, or major shareholders purchasing shares of their own company's stock. Insider purchases can send a positive signal to the market that insiders believe the company's stock is undervalued and has potential for future growth. They also align the interests of the company's management and shareholders. Insider buying can increase transparency and accountability by providing information about the company's financial health and growth potential. This information can help investors make more informed decisions about whether to invest in the company's stock.
According to a report from Argus Research in June 2022, corporate insiders seemed to recognize the value of their stocks, as per high trading activity at the time. Vickers Stock Research data was cited by Argus, which noted that insiders purchased shares of their respective companies in large numbers during June’s significant stock market decline. The report stated that the data indicates that corporate insiders were either buying their own company's stock at the same frequency as they were selling it, or they were buying more than they were selling. This surge in insider buying resulted in a sell-to-buy ratio of almost 1.0 in the eight-week period, which the report described as a "very healthy" level. Typically, insiders tend to sell their shares 2-2.5 times more frequently than they purchase them. Argus further explained:
"While there are many reasons to think stocks could fall further, current insider sentiment is not one of them. Insiders apparently see across-the-board value in stocks as they are ‘keeping the faith.’”
Investors should pay attention to the positive signal sent by corporate insiders, especially in light of the current economic climate. With inflation at a 40-year high, interest rates increasing rapidly, and the possibility of a recession looming, insider buying can provide reassurance to investors about the potential health and stability of their investments. Some of the companies which experienced significant insider buying in 2022 include Occidental Petroleum Corporation (NYSE:OXY), Analog Devices, Inc. (NASDAQ:ADI), and Sysco Corporation (NYSE:SYY). However, in this article, we discuss the top small-cap stocks with insider buying.
Our Methodology
We used a stock screener to filter for small-cap stocks, which have market caps between $300 million to $2 billion. Then we filtered for companies with insider transactions of more than 20%. This metric represents six-month percentage change in total insider ownership. The resultant dataset was ranked according to market cap in the descending order, and we selected the top small-cap firms with insider purchases during 2022 onwards. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the fourth quarter of 2022. The list is arranged in ascending order of the number of hedge fund holders in each firm.
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Small-Cap Stocks With Insider Buying
12. Diversey Holdings, Ltd. (NASDAQ:DSEY)
Number of Hedge Fund Holders: 13
Diversey Holdings, Ltd. (NASDAQ:DSEY) was founded in 1923 and is headquartered in Fort Mill, South Carolina. The company provides infection prevention and cleaning solutions worldwide. It operates through two segments – Institutional, and Food & Beverage. On May 13, 2022, Diversey Holdings, Ltd. (NASDAQ:DSEY)’s director purchased 121,210 shares priced at $8.67, making it one of the top small-cap stocks with insider buying.
On February 22, BofA analyst Steve Byrne reinstated coverage of Diversey Holdings, Ltd. (NASDAQ:DSEY) with an Underperform rating and a $6 price target. The company's earnings have been negatively affected by its presence in Europe and continuous cost inflation, which are expected to persist in the near future, according to BofA's message to investors. Diversey Holdings, Ltd. (NASDAQ:DSEY) has had difficulty countering the 40% rise in raw material costs over the last two years, and although cost deflation may not happen until late 2023, the company has been struggling, the analyst wrote in a research note.
According to Insider Monkey’s fourth quarter database, 13 hedge funds were bullish on Diversey Holdings, Ltd. (NASDAQ:DSEY), compared to 12 funds in the prior quarter. David Brown’s Hawk Ridge Management is the largest stakeholder of the company, with 4.13 million shares worth $17.6 million.
Like Occidental Petroleum Corporation (NYSE:OXY), Analog Devices, Inc. (NASDAQ:ADI), and Sysco Corporation (NYSE:SYY), Diversey Holdings, Ltd. (NASDAQ:DSEY) is one of the stocks with insider buying during 2022.
Here is what White Falcon Capital Management has to say about Diversey Holdings, Ltd. (NASDAQ:DSEY) in its Q3 2022 investor letter:
“Diversey Holdings is a provider of cleaning and hygiene products in the hospitality, healthcare, food and beverage, food service, retail, and facility management sectors. Their suite of solutions combines patented chemicals, dosing and dispensing equipment, cleaning machines, and services. Headquartered in the US, Diversey is a multinational serving more than 85,000 customers in over 80 countries with a network of 8,500 employees. It has a market capitalization of $1.4 bn, an EV of $3.2 bn and is 73% owned by Bain Capital. The company is currently trading at 10x depressed 2022A EBITDA or 7.0x normalized 2025E EBITDA.”
11. JBG SMITH Properties (NYSE:JBGS)
Number of Hedge Fund Holders: 14
JBG SMITH Properties (NYSE:JBGS) owns, manages, finances, and constructs a diverse set of mixed-use real estate assets with significant growth potential in and near Washington, DC. In 2022, JBG SMITH Properties (NYSE:JBGS) directors acquired about 15,000 shares of the company during May and August, priced between $23.15 and $24.67.
On March 3, JBG SMITH Properties (NYSE:JBGS) reported that the initial stage of construction for Amazon's new "National Landing" headquarters is proceeding as planned and is set to open in the summer of 2023 without any interruptions or delays. Amazon's new Met Park offices will provide room for as many as 14,000 Amazon employees, including the 8,000 current Amazon workers. JBG SMITH Properties (NYSE:JBGS) has indicated that it is still collaborating with Amazon on the next stage of the project, which will consist of three office structures and The Helix and will occupy 3.3 million square feet.
According to Insider Monkey’s Q4 data, JBG SMITH Properties (NYSE:JBGS) was part of 14 hedge fund portfolios, compared to 12 in the prior quarter. John Khoury’s Long Pond Capital is the biggest position holder in the company, with 8.5 million shares worth $161.7 million.
Here is what Aristotle Capital Management Small Cap Equity has to say about JBG SMITH Properties (NYSE:JBGS) in its Q1 2022 investor letter:
“JBG SMITH Properties (NYSE:JBGS), a Washington DC-based owner, operator and developer of residential, office, retail and mixed-use real estate properties, was added to the portfolio. We initiated a position, as we believe the firm’s healthy multi-year development pipeline anchored by Amazon’s new headquarters (Amazon HQ2) should benefit from improved economic activity in the area as businesses increasingly return to the office.”
10. Earthstone Energy, Inc. (NYSE:ESTE)
Number of Hedge Fund Holders: 14
Earthstone Energy, Inc. (NYSE:ESTE) was incorporated in 1969 and is headquartered in The Woodlands, Texas. It is an independent oil and gas company that specializes in the acquisition, exploration, development, and production of oil and natural gas properties in the United States. In 2022, large shareholders of the company collectively purchased over 2 million shares of Earthstone Energy, Inc. (NYSE:ESTE), which merits its inclusion in our list of the top small-cap stocks with insider buying.
In Q4 2022, Earthstone Energy, Inc. (NYSE:ESTE) produced an average of 104,766 barrels of oil equivalent per day, which is a significant increase of 246% compared to the same quarter last year when they produced 30,242 Boepd. For the full year of 2022, their average daily production increased by 215% to approximately 78,167 Boepd, compared to 24,809 Boepd reported in 2021.
On January 9, Mizuho analyst Nitin Kumar initiated coverage of Earthstone Energy, Inc. (NYSE:ESTE) with a Neutral rating and a $19 price target. While the company has successfully reached a reasonable scale in the Permian through timely acquisitions, Kumar noted that they still need to achieve stability in their operations and trading activity. Additionally, the analyst expressed caution regarding well productivity in the southern Midland.
According to Insider Monkey’s fourth quarter database, 14 hedge funds were bullish on Earthstone Energy, Inc. (NYSE:ESTE), compared to 21 funds in the last quarter. OnyxPoint Global Management is the biggest stakeholder of the company, with 5.4 million shares worth $77.7 million.
9. Minerals Technologies Inc. (NYSE:MTX)
Number of Hedge Fund Holders: 14
Minerals Technologies Inc. (NYSE:MTX) is a New York-based company that develops, produces, and commercializes specialty mineral, mineral-based, and synthetic mineral products, as well as supporting systems and services. On March 7, 2022, an officer at Minerals Technologies Inc. (NYSE:MTX) acquired 100 shares of the company, priced at $63.75 each.
On January 25, Minerals Technologies Inc. (NYSE:MTX) declared a quarterly dividend of $0.05 per share, in line with previous. The dividend is distributable on March 9, to shareholders of record as of February 16.
Investment advisory Sidoti downgraded Minerals Technologies Inc. (NYSE:MTX) to Neutral from Buy with a $70 price target on February 3. Analyst Steve Ferazani issued the ratings update.
According to Insider Monkey’s Q4 data, 14 hedge funds reported owning stakes in Minerals Technologies Inc. (NYSE:MTX), compared to 16 funds in the earlier quarter. Mario Gabelli’s GAMCO Investors is the largest stakeholder of the company, with 213,400 shares valued at nearly $13 million.
Carillon Tower Advisers made the following comment about Minerals Technologies Inc. (NYSE:MTX) in its Q3 2022 investor letter:
“Minerals Technologies Inc. (NYSE:MTX) produces performance-enhancing minerals for manufacturers of paper, steel, polymers, and other materials that are used in a variety of consumer and industrial products. The company experienced double digit revenue growth in all segments in the prior quarter, but cost inflation and unfavorable currency fluctuations pressured margins.”
8. Kymera Therapeutics, Inc. (NASDAQ:KYMR)
Number of Hedge Fund Holders: 15
Kymera Therapeutics, Inc. (NASDAQ:KYMR) is a Massachusetts-based biopharmaceutical company that aims to find and create new types of small molecule therapies that can target and break down specific disease-causing proteins by utilizing the body's natural protein degradation process. There have been frequent insider purchases at Kymera Therapeutics, Inc. (NASDAQ:KYMR) in 2022 and 2023, making it one of the best small-cap stocks with insider buying.
As of December 31, 2022, Kymera Therapeutics, Inc. (NASDAQ:KYMR) had approximately $559.5 million in cash, cash equivalents, and investments. Kymera Therapeutics, Inc. (NASDAQ:KYMR) anticipates that its current cash and cash equivalents will sustain the company's operations until the latter half of 2025. This period is expected to include the completion of Phase 2 testing for KT-474 and initial proof-of-concept testing for KT-413, KT-333, and KT-253. Kymera also plans to seek out opportunities to enhance growth and broaden its pipeline, technologies, and clinical applications during this time.
On December 15, B. Riley analyst Kalpit Patel raised the firm's price target on Kymera Therapeutics, Inc. (NASDAQ:KYMR) to $37 from $35 and maintained a Neutral rating on the shares after the company announced data assessing KT-474 in patients with hidradenitis suppurativa and atopic dermatitis.
According to Insider Monkey’s fourth quarter database, 15 hedge funds were long Kymera Therapeutics, Inc. (NASDAQ:KYMR), compared to 19 funds in the prior quarter. Mark Lampert’s Biotechnology Value Fund / BVF Inc is the largest stakeholder of the company, with 4.7 million shares worth $117 million.
7. The Bancorp, Inc. (NASDAQ:TBBK)
Number of Hedge Fund Holders: 17
The Bancorp, Inc. (NASDAQ:TBBK) was incorporated in 1999 and is headquartered in Sioux Falls, Delaware. It operates as the financial holding company for The Bancorp Bank that provides banking products and services in the United States. Insiders purchased nearly 22,600 shares of The Bancorp, Inc. (NASDAQ:TBBK) in 2022 and 2023, making it one of the top small-cap stocks with insider transactions.
On January 26, The Bancorp, Inc. (NASDAQ:TBBK) reported Q4 GAAP earnings per share of $0.71 and a revenue of $102.5 million, outperforming Wall Street estimates by $0.01 and $29.78 million, respectively. Revenue over the period climbed 27.5% on a year-over-year basis.
Piper Sandler analyst Frank Schiraldi maintained an Overweight rating on The Bancorp, Inc. (NASDAQ:TBBK) but lowered the firm's price target on the shares to $29 from $31 on October 12. In a research note to investors, the analyst stated that bank-as-a-service (BaaS) companies are still providing profitable investment prospects in the banking sector. Despite traditional banks being unpopular due to the possibility of a recessionary period, Schiraldi anticipates significant growth trends in BaaS due to high demand for debit partnership and natural asset sensitivity.
According to Insider Monkey’s fourth quarter database, 17 hedge funds were long The Bancorp, Inc. (NASDAQ:TBBK), compared to 15 funds in the prior quarter. Connor Haley’s Alta Fox Capital Management is the largest stakeholder of the company, with 276,900 shares worth $7.85 million.
6. Criteo S.A. (NASDAQ:CRTO)
Number of Hedge Fund Holders: 17
Criteo S.A. (NASDAQ:CRTO) is a technology company that offers marketing and monetization services on the open Internet. On November 7, 2022, a director at Criteo S.A. (NASDAQ:CRTO) purchased 495 shares of the company valued at $23.86 each. The company expects a significant increase in Contribution ex-TAC (excluding traffic acquisition costs) at a relatively modest rate, ranging from high single digits to low double digits when adjusting for currency fluctuations. This increase also takes into account the impact of its acquisition of Iponweb.
Matthew Thornton, an analyst at Truist, increased the firm's price target on Criteo S.A. (NASDAQ:CRTO) from $35 to $40 and maintained a Buy rating on the stock on February 14, following its Q4 earnings report. The analyst incorporated the recent news from Reuters that Criteo S.A. (NASDAQ:CRTO) is exploring a potential sale into the firm's financial model. Truist remains optimistic about Criteo due to its potential for mergers and acquisitions and its continued share buybacks during a promising phase of product development.
According to Insider Monkey’s fourth quarter database, 17 hedge funds were bullish on Criteo S.A. (NASDAQ:CRTO), compared to 15 funds in the earlier quarter. Michael Platt and William Reeves’ BlueCrest Capital Mgmt. is the largest stakeholder of the company, with 2.26 million shares worth $58.8 million.
In addition to Occidental Petroleum Corporation (NYSE:OXY), Analog Devices, Inc. (NASDAQ:ADI), and Sysco Corporation (NYSE:SYY), insider purchases occurred at Criteo S.A. (NASDAQ:CRTO) in 2022.
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Disclosure: None. 12 Small-Cap Stocks With Insider Buying is originally published on Insider Monkey.